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«Inaugural-Dissertation zur Erlangung des Doktorgrades des Fachbereichs Wirtschaftswissenschaften der Johann-Wolfgang Goethe-Universität Frankfurt am ...»

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Those jobs may be based on trust but they also inhibit women to think about them as careers and therefore are not worthwhile fighting for. That fact is reinforced by a society that does not define male and female as equals and thus contributes to women not resisting their positions. Independent women are still of no good reputation because this means loss of control over them and possible exploitation by men outside the family.1118 Greenhalgh, 1994, p. 753f. and 760.

Croll, 1995, p. 120.

Greenhalgh, 1994, p. 754 and 758.

Greenhalgh, 1994, p. 759+162.

However, also the Guanxi networks are mainly ‗owned‘ by the male head of the enterprise. Personal ties are the most useful resource especially for the other family members who are not able to acquire other kinds of assets. To women, even that possibility is very restricted because their jobs offer few opportunities to build a network of business contacts, because they are mainly concerned with ‗inside‘ functions.1119 As mentioned above, the gender aspect is also used in business negotiations. For one part, they often take place in karaoke bars where women are treated as objects in the maledominated Chinese society. Another method is to hire ―business-meeting hostesses‖ who entertain the business men and also are said to handle discussions ―gentler and softer‖ in creating a relaxed atmosphere and by that lower the guard of the opposite business party.1120 Gender is also utilized to obtain information about a business partner in sending the opposite sex to ―soften‖ the ―target‖. Also, young women feel less constrained when talking to other women. Thus, gender is used to establish Guanxi and to obtain information on the other person that can be used in the future.1121 Therefore, the success of family firms, instead of being mutually beneficial, is more based on rigid inequalities of gender and generation within the family and firm. Rather than building upon old traditions, the recourse to Confucian values and Guanxi is used to reinvent old forms of family life which is dominated by men, the patriarchs.1122 However, it has been claimed by organization like the All-China Women‘s Federation (ACWF) that the status of women has significantly increased since the beginning of reforms. However, although it gave women a wider range of opportunities, the status itself has not been raised within or outside the family, at least not for the average female worker (compared to women whose families are part of the ‗new rich‘, see chapter 7). Women in entrepreneurial families are involved in the establishment of business and engage in strategic planning and in the management of daily operations, often being the boss of the business that is still often registered under the husband‘s name. Still, gender stereotypes play a decisive role, especially the notion of ‗inside‘ women and ‗outside‘. Although it became not uncommon for women to go to restaurants and karaoke bar and drinking alcohol, which traditionally was a highly male dominated space, the notion of inside and outside still effects the division of labor. The ‗inside‘ has been extended to the family enterprise Greenhalgh, 1994, p. 756-761.

Nojonen, 2007, p. 39f.

Nojonen, 2007, p. 40.

Whyte, 1996, p. 13 and Greenhalgh, 1994, p. 748.

but it is still the husband that represents it to the outside. The management of a company belongs to the inside and thus to the female realm, whereas the entertaining of costumers and connections to government officials is an outside, thus male sphere. Entertaining clients outside the office is still conceived as inappropriate for women. So, although a new degree of public participation has been reached for women, they are still subject to the traditional gender expectations, even if they belong to the class of the ‗new rich‘.1123

6.4. The specificity of Guanxi networks 6.4.1. Networks and the German Mittelstand In the early phase of the European industrialization, contractual security and control were not protected by government authorities in Germany (or for that matter elsewhere in Europe).1124 Therefore, entrepreneurs had to rely on trust-based networks to secure the quality of their products. The foundation of these networks was often the family. Families connected their businesses over strategic marriages that ensured the adherence to the mostly unwritten agreements. Also, the time spend together in boarding schools established a shared identity, values and connections which as adults were further developed and maintained in clubs or associations. These clubs were an important means to help navigating between the now differentiating spheres of private life, business, politics and society.1125 Access to those clubs was often exclusive and coupled with high membership fees. Besides socializing, those clubs were a platform for business negotiations. As member of a club you were welcome in similar clubs in other cities or abroad which was an important device for conducting business nationally and internationally.1126 They also assisted in building a good reputation which was essential for being successful in business which then again meant that without success you were prone to lose respectability and in the long-run the access to the influential circles.1127 In constructing a civil society that boosted economic relations, entrepreneurs also created a self-identity of which the management of mass producing large-scale enterprises and material interests was the common denominator.1128 A social formation was conChen, 2008, p. 120ff.





For the relationship between entrepreneurs and the government, please refer also to chapter 8.

Groppe, 2010, p. 54ff, 142f., 354f., 429.

Groppe, 2010, p. 357.

Kocka, 1976, p. 177, Soénius, 2000, p. 67.

Schäfer, 2009, p. 80ff.

structed that justified its distinctiveness not by birthrights but through wealth and qualifications.1129 The status of this entrepreneurial class within society and their economic independence also empowered them to influence the organization of society and the state, especially concerning a legal framework for economic transactions. This in turn meant gains for civil liberties, like freedom of trade, private property, equality etc. Actually, local government and leadership of local parties were often in the hand of entrepreneurs.1130 After 1848 the interest in political participation trickled away and people felt well represented by the existing economic policy.1131 In contrast to Sombart‘s and Weber‘s expectations, the majority – at least in total number – of (German) firms were still small and middle sized in the beginning and then again at the end of the 20th century. In 1999 the 3.2 million small and medium enterprises (SMEs) (or 99.3 percent of all firms) employed 20 million people (or twothirds of the working force). However, the middle of the 20th century saw the predicted consolidation of companies to large-scale enterprises. This trend was again revised towards the end of the 20th century with the emerging transnational production and globalization.1132 The success of small enterprises is seen in their complementary relevance for large-scale enterprises as subcontractors or in niche and specialized markets. In these markets smaller enterprises have the comparative advantage of flexibility. SMEs and entrepreneurship were also seen as means to overcome unemployment by encouraging self-employment and to confront the global competition that was best faced with lean organizational structures and flexible production.1133 From the 1960s, the German government systematically subsidized SMEs, for example in expanding the German anti-trust law to improve competition policies and regulations.

Apart from economic reasons, the legal framework also had the aim to support the middle class, which traditionally formed the buffer between the values of the upper and the working classes. From the 1970s a so-called ‗new middle class‘ emerged that realized that they had to collaborate with other small-scale entrepreneurs in joint ventures or within networks to be successful. Co-operation enables to compete with larger corporations and is the most Puhle, 1991, p. 118.

Groppe, 2010, p. 318ff., Schäfer, 2009, p. 168, 136.

Soénius, 2000, p. 443.

See Piore and Sabel, 1984 for an extensive discussion.

Berghoff, 2004, p. 107-113.

rational way for utility maximizing entrepreneurs. Hence, even within networks individualism prevails.1134 These networks have often more formal and contractual relations, set up and formed by political bodies and private economic associations. As has been outlined in chapter 3, they can be organized in the form of either strategic and or networks.1135 However, both types of networks focus on economic functionality rather than maintaining of interpersonal relationships, with the latter additionally concentrating on specific regional areas to facilitate access for smaller firms to specialized labor pools, suppliers, know-how, R&D and market research, customer service and training facilities, which without co-operation they would not be able to afford.1136 Additionally, administrative and financial support is given by economic associations, and infrastructure is provided by an actively involved local government.1137 In general, changing the legal regulations and creating suiting environments was easier for regional networks than for strategic ones as the latter were only approved for rationalization cartels.1138 Within these ―decentralized, but integrated industrial districts is a seemingly contradictory combination of competition and cooperation‖, with a mixture of low vertical and high horizontal integration. On the one hand, firms are competitors always trying to outcompete other contestants, on the other hand happily co-operate in the aforementioned areas and subcontract to the their competitors when business is low.1139 This ―professional solidarity‖ and the competition for the best product led to high quality standards.1140 Additionally, shared distribution and marketing channels lowered transaction cost considerably and created economies of scale and scope for each of the small firms for the price of giving up some of their autonomy and free decision making. The regional networks are often constructed around an ‗anchor‘, a large-scale enterprise, for which small firms serve as specialized subcontractors (for example DaimlerChrysler has a huge network of several hundred small firms, all concentrated in Baden-Württemberg).

Besides that, regional clusters are actively using local chambers and associations to coordinate activities and lobby in politics in favor of the network. These organizations serve also as mediation- and sanctioning mechanisms and thus further stabilize local structures and enhance trust building. As firms are always in need of (market) information, netBerghoff, 2004, p. 122ff., 172ff.

Berghoff, 2004, p. 177ff.

Lazerson, 1988, p. 331.

Putnam; Leonardi and Nanetti, 1993, p. 160.

Dörsam and Icks, 1997, p. 1, 17, 56ff.

Putnam; Leonardi and Nanetti, 1993, p. 160.

Piore and Sabel, 1983, p. 402.

works are good structures to obtain them quite efficiently.1141 Also, workshops or organizations like trade chambers offer information, hence, membership in associations and other official bodies facilitates access to business opportunities and therefore serve multiple functions.1142 To be successful, entrepreneurs need to be able to navigate within these formal structures and position themselves strategically to negotiate on a political level.1143 Often entrepreneurs, although they would probably benefit from being part of a network, are highly hesitant to engage in network activities as collaborating with competitors is not conceived as desirable as it is not secured in contracts and hence an equivalence of merits cannot be guaranteed, which is a significant factor for (German) entrepreneurs.1144 They are used to ―balanced reciprocity‖, hence a ―simultaneous exchange of items of equivalent value‖, whereas networks, especially of the kind of successful organically developed regional clusters in Europe (and their Chinese counterparts) depend more on ―generalized reciprocity‖ that consists of a ―continuing relationship of exchange that is at any given time unrequited or imbalanced, but that involves mutual expectations that a benefit granted now should be repaid in the future‖. On the contrary, ―a gift which clearly and blatantly paid off the debt and thereby ended the relationship of obligation between the two parties would be considered shockingly offensive‖.1145 Reciprocity like that is ―made up of a series of acts each of which is short-run altruistic - but which together typically make every participant better of‖.1146 Also, networks are often not regarded as such but entrepreneurs are rather referring to co-operations with other firms which are not seen as the same thing. However, only a minority of German SMEs engages in networks or other cooperations as collaboration is received as weakness and the advantages of networks are often not obvious.1147 Besides the affinity for contracts and legal arrangements, German entrepreneurs are also highly individualistic and in general less prone for co-operation within networks.1148 Building long-term connections and trust takes time and is often regarded as contradicting the paradigm of flexible production. Without corresponding traditions or a culture that emphasizes personal relations this process can only take place with the help of an external agency – such as the state – that creates the legal and formal institutions necessary for coCasson, 2001, p. 536f.

Fiedler and Lorentz, 2003, p. 54.

Kocka, 1975, p. 128.

Hirsch-Kreinsen, 2002, p. 108, 110, 112.

Hsu, 2005, p. 312.

Putnam; Leonardi and Nanetti, 1993, p. 172.

Dörsam and Icks, 1997, p. 39, 42, similar in Berghoff, 2003, p. 98.

Dörsam and Icks, 1997, p. 47ff.



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